AAON(AAON)2024-05-02 20:07Revenue and Sales Performance - Total revenue for the three months ended March 31, 2024, was $262.1 million, compared to $266.0 million for the same period in 2023, reflecting a decrease of 1.5%[29] - Rooftop units generated $191.3 million in sales for the three months ended March 31, 2024, an increase from $180.0 million in the same period of 2023, representing a growth of 6.8%[29] - Sales to affiliates increased to $2,196,000 for the three months ended March 31, 2024, compared to $1,145,000 for the same period in 2023, representing an increase of 92.1%[96] - External sales for AAON Oklahoma reached $210,140,000 for the three months ended March 31, 2024, up from $202,002,000 in the same period of 2023, reflecting a growth of 4.3%[101] - AAON Coil Products reported external sales of $24,247,000 for the three months ended March 31, 2024, down from $33,412,000 in the same period of 2023, a decline of 27.4%[101] - BASX external sales were $27,712,000 for the three months ended March 31, 2024, compared to $30,539,000 in the same period of 2023, a decrease of 9.3%[101] - Total net sales for the company were $262,099,000 for the three months ended March 31, 2024, slightly down from $265,953,000 in the same period of 2023, a decrease of 1.1%[101] Financial Position and Liabilities - The company reported a lease liability of $14.9 million long-term as of March 31, 2024, compared to $10.2 million at the end of 2023, indicating a 46.1% increase[38] - The company entered into a lease agreement for an additional 157,550 square feet in January 2024, supporting operations and parts distribution[37] - The discount rates used for lease payment present value calculations range from 1.3% to 6.6% as of March 31, 2024[37] - The company had no amounts outstanding under its $200 million revolving credit facility as of March 31, 2024, compared to $38.3 million outstanding as of December 31, 2023[52] - The leverage ratio was 0.01 to 1.0 as of March 31, 2024, well below the maximum requirement of 3 to 1[53] - Total long-lived assets increased to $407,260,000 as of March 31, 2024, compared to $381,721,000 as of December 31, 2023, an increase of 6.7%[101] Income and Earnings - Net income for the three months ended March 31, 2024, was $39,016,000, an increase from $36,814,000 in the same period of 2023, representing a 5.9% growth[79] - Basic earnings per share for the three months ended March 31, 2024, was $0.48, compared to $0.46 for the same period in 2023, reflecting a 4.3% increase[79] - The company reported earnings per share of $82.50 for the three months ended March 31, 2024, compared to $58.83 for the same period in 2023[82] Expenses and Costs - Payments to representatives for the three months ended March 31, 2024, were $10.8 million, down from $13.3 million in the same period of 2023, a decrease of 18.8%[34] - Total net inventories decreased to $196,252 thousand as of March 31, 2024, compared to $213,532 thousand on December 31, 2023, a reduction of 8.1%[42] - Warranty accrual increased to $21,349 thousand as of March 31, 2024, compared to $16,209 thousand on March 31, 2023, an increase of 31.5%[48] - Interest paid decreased to $395 thousand for the three months ended March 31, 2024, down from $1,121 thousand for the same period in 2023, a decline of 64.7%[46] - Current income tax provision increased to $8,532 thousand for the three months ended March 31, 2024, compared to $5,435 thousand for the same period in 2023, an increase of 56.5%[55] Stock and Compensation - The total intrinsic value of options exercised during the three months ended March 31, 2024, was $14.2 million, compared to $16.7 million for the same period in 2023[62] - The cash received from options exercised during the three months ended March 31, 2024, was $9.8 million, down from $15.9 million in 2023[62] - The total pre-tax compensation cost related to unvested stock options not yet recognized as of March 31, 2024, is $14.7 million, expected to be recognized over approximately 2.3 years[62] - The fair value of unvested restricted stock awards as of March 31, 2024, is approximately $7.6 million, expected to be recognized over a weighted average period of 2.1 years[63] - The company granted 46,699 performance restricted stock units (PSUs) during the three months ended March 31, 2024, with a weighted average grant date fair value of $106.24[67] - For the three months ended March 31, 2024, the total share-based compensation expense was $17,861,000, compared to $10,820,000 for the same period in 2023, reflecting a 65.5% increase[72] - The company’s share-based options compensation expense for the three months ended March 31, 2024, was $2,207,000, compared to $2,065,000 for the same period in 2023[72] Employee and Operational Metrics - The company has 36,860 employees as of March 31, 2024, compared to 17,509 employees a year earlier[82] - The company matched 175% of employee contributions to the 401(k) plan, resulting in contributions of $5,710,000 for the three months ended March 31, 2024, up from $5,259,000 in the same period of 2023[73] - Medical premium payments for the three months ended March 31, 2024, totaled $3,371,000, compared to $2,668,000 for the same period in 2023, indicating a 26.3% increase[77] - The discretionary profit-sharing bonus plan expense for the three months ended March 31, 2024, was $4,600,000, a decrease from $4,866,000 in the same period of 2023[75] Tax and Credits - The company reported an effective tax rate of approximately 25.6% for the year 2024, excluding discrete events[56] - As of March 31, 2024, the company has investment tax credit carryforwards of approximately $2.3 million, expiring between 2039 and 2043[56] Legal and Commitments - The company settled a litigation case with Havtech for $7.5 million, which has been included in accrued liabilities and selling, general, and administrative expenses[94] - The company executed a five-year purchase commitment for refrigerants, with estimated minimum future payments of $8.3 million, $9.1 million, $10.5 million, and $11.2 million for 2024, 2025, 2026, and 2027, respectively[95] Investments and Growth - The company received a $23.0 million New Markets Tax Credit allocation for the 2023 Project, facilitating the expansion of its Longview, Texas manufacturing operations[91] - The company provided approximately $16.7 million to the 2023 Investor in the form of a loan receivable, which was used to make a $23.8 million loan to a subsidiary[91] - The company issued 0.24 million shares in March 2024 related to the earn-out milestone for the year ended 2023, increasing additional paid-in capital by $6.4 million[88] Goodwill and Intangible Assets - The carrying amount of goodwill remained unchanged at $81.9 million as of March 31, 2024, consistent with the previous period[25] - Total intangible assets increased to $70,664 thousand as of March 31, 2024, up from $68,053 thousand on December 31, 2023, reflecting a growth of 3.8%[43] - Total future amortization expense for finite-lived intangible assets is estimated at $51,255 thousand[45] Credit and Losses - The allowance for credit losses increased to $435 thousand as of March 31, 2024, from $421 thousand on December 31, 2023, an increase of 3.3%[41]